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About Me

I'm a twenty something working to pull everything together. This blog is an outline of the ways I’m working on keeping track of paying down debt, saving, and making more money. I’ll cover the methods that work for me, things I’m trying out, and great ideas/tips I stumble over on the blogosphere.

Saturday, April 18, 2009

New Car Loan Detail

We bough Gameboy's new Prius late last month. This week we got a new loan from a credit union. Why change loans after 3 weeks? A little thing called the interest rate.

When we sat down to do the financing at the dealership the first rate they told us was 7.99%. I looked at them like they had lost their mind. My auto credit score was low/mid 700's, his was upper 600's. In most of the places where we shopped the loan those rates put us in the first or second tier. We hemmed and hawed a bit. The finance guy magically came up with 5.74% from a bank they partner with. Because we had the option to shop the loan in the first 45 days (and I was driving 100 miles a day to get us both to work) we told them to start processing.

The next few days I called all of the banks/credit unions where we have accounts. We bank with a big bank, I have another account with a national bank, and I have two credit union accounts that I go back and forth about closing back home. One bank couldn't beat 5.74%, the other took 8 days to call me back. Both credit unions had rates just under 5%. We gave both permission to run our credit so we could get exact answers. The first offered 4.6%, which we were ok with. The second offered 4.4%, making us happier.

As we started the long distance paperwork I went to their website a lot. I'm bad at keeping track of phone numbers. On day 2 of the process their leading banner changed from something about college loans to new car loan rates for 'green cars.' I can't remember the last time I dialed that fast.

The final verdict: 4.15% interest with payments at $506. The difference in finance charge is ~$1,5oo. Not that we plan on having the loan for the full 60 months ;). We're thinking we'll get it knocked out in around 2.5 years.

In the future I'd shop the loans and get the better rate first, but if you have a loan with a crappy rate looking into refinancing with a credit union may be a good idea.